Hematite Paint Company.

In handing you Prospectus of the proposed Hematite Paint Company, we desire to explain that, as the amount of capital required is small, and the bulk of the Shares may be taken up by a few, it may be a question whether it might not be better to keep it as a Private Partnership instead of a Public Company; but this will be left to the decision of those to whom the Shares are allotted.

The paint is now selling at about £25 at the works, but it is believed that if the price was made about £20 the demand would be very much increased, and keep the present machinery, which can produce about six tons paint per week, fully employed. The prime cost, including expenses of sale and everything, will not, with the use of the Patent, exceed £12 to £15 per ton, and when the works are transferred to Para Para, about £10. This, considering the small capital, will yield a very handsome return. It is proposed to call up only £1 per share. The £1,500 is the amount the undertaking is costing the Promoters in cash, and the 1,500 Shares also include those accepted by Messrs. Louisson, Johnston, and Travers in part payment of their interests. Mr. Louisson has agreed to manage the works for the new Company. Samples of the paint and ore have been sent to the Home Country, with the view of ascertaining values, and it will most likely be found that the paint will pay to ship, in which case the demand will be unlimited, and it may become desirable to increase the machinery. A very small outlay under this head would increase the productive powers of the Company very much.

Further information can be obtained from either of us, and Mr. Turnbull will act for the present as interim Secretary.

page 45

Prospectus of the New Zealand Hematite Paint Company.

(To be registered with Limited Liability under the "Joint Stock Companies Act.")

Capital, £12,000, in 6,000 Shares of £2 each.

This Company is formed for the purpose of manufacturing paint from the Hematite Iron Ore found near the Para Para inlet, in the Provincial District of Nelson. For some years past, during which this business has been carried on in two small factories in the town of Nelson, the paint has steadily risen in demand as its valuable qualities have become known; so that the time appears to have arrived for placing the manufacture on a wider basis, with the aid of more ample capital and business connections.

Hematite paint, being a pure peroxide of iron, is preferable for painting buildings, bridges, and other structures made of that metal, to any lead paint, which, as is well known, gradually corrodes the iron, in consequence of the galvanic action set up between them. The Nelson paint has, therefore, come into general use in the railway service. The estimation in which it is held, after thorough trials by competent authorities, may be seen by the testimonials appended to this prospectus. The paint is not less advantageous when applied to wood as priming, since it possesses the inestimable advantage of rendering the latter almost uninflammable—a fact which cannot fail to attract the attention of the insurance companies. Hematite paint is also cheaper than any other; for not only is the price lower, but, weight for weight, it covers a larger surface than any other.

The iron ore does not require to be won as in England by mining operations, but is simply quarried where it lies in huge masses; millions of tons covering the ground within a short distance from the sea.

Although the manufacture, as at present carried on, labours under the disadvantage of bearing the freight from Para Para to Nelson of three tons of iron ore for every ton of paint made, it has been realizing a very satisfactory profit. The profits will, however, be largely increased when the factory is erected in immediate proximity to the deposit of ore, as it is intended shall be done shortly. page 46 A further saving in the cost of manufacture will be effected by substituting water power from the Para Para river, which runs through the land held by the promoters, for the more expensive steam power at present used; and by using wood fuel cut on the spot. There is abundance of timber on the various leases; and on one of them a coal seam, as yet unworked, has been found.

Agreements have been entered into, by which both the Nelson Factories (the only ones in the colony), with the goodwill of their business, and the patent granted to Mr. T. B. Louisson (by which a large saving is effected in the manufacture of the paint) are transferred to the promoters. These gentlemen have purchased from the liquidators of the Para Para Iron-mining Company the Hematite Iron Mine, comprising 105 acres freehold and 600 acres leasehold, at a rental of £30 per annum, with seventeen years to run. They have also purchased the leasehold of Messrs. Louisson and Johnston, comprising 50 acres of the Hematite block; and have further taken on lease for 21 years an adjoining section of 192 acres, which, in Dr. Hector's opinion, contains the finest hematite in the whole block. Lastly, they have arranged with W. T. L. Travers, Esq., owner of four adjoining sections, to grant to the Company the sole right of taking from his land hematite for the purpose of manufacturing paint; thus securing for the proposed manufacture the exclusive use of the whole of this magnificent iron-field, and precluding the possibility of competition.

For the foregoing properties the promoters have agreed to accept .£1,500 in cash, with 1,500 paid-up shares, reserving only to themselves the right of manufacturing iron and steel from the vast deposit of hematite on the land in question. Five tons of this ore, smelted at Melbourne some months since, produced an iron equal to the finest Swedish. Should a Company be formed hereafter in England for this purpose, the shares allotted to New Zealand will be offered to the Shareholders in the Hematite Paint Company before being thrown open to other applicants.

A large number of shares have already been applied for. For the remainder, applications can be made to the Interim Secretary, to whom also the deposits can be paid. The payments will be 2s. 6d. on application, 5s. on allotment; and calls, not exceeding 2s. 6d. each, at intervals of not less than three months.

The principal office of the Company will be at Dunedin, but provision will be made in the Articles of Association for a certain number of Directors being chosen from the Shareholders elsewhere.